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Personal Finance Read the fine print. Not all travel insurance is equal

Most people have a story of a friend of a friend who got sick or injured while travelling and ended up tens of thousands of dollars poorer as a result. Yet when asked if they want travel medical insurance, the gut reaction might be "no" for a variety of reasons. Since medical emergencies can have financially catastrophic results, it's normally an insurance worth buying.

Some credit cards might offer it if purchased on those specific cards, but are all coverages created equal? "No," says Tammy Ezer of InsuranceHotline.com, "it's unwise to assume you are covered, and very wise to read over the fine print as policies vary from card to card and from carrier to carrier."

For example, I pulled up the fine print on a card issued by one of the big five banks for their out-of-province travel medical insurance. I actually had to click on the zoom button five times before it was easily readable. With this particular card, you are not covered if you are over 65 and coverage only lasts for the first 15 days you are out of province, including the departure date. You can extend your coverage by calling a number, but how many people would know that? "Pre-existing symptoms may invalidate coverage entirely for medical emergencies in any way connected with those conditions," says Ms. Ezer.

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Trip cancellation insurance is less important. While missing a trip that has been paid for wouldn't be pleasant by any means, you would survive financially. You know exactly what you would be out: the amount paid when booking the trip. With a medical emergency, your bill could potentially run into the $50,000-plus range. And that's a big "plus" range. Besides, coverage for trip cancellation insurance normally requires a death in the family – someone getting too sick to travel, but not sustaining anything life-threatening doesn't count. Again, exact details vary by policy.

What if you lose your camera or other valuables? Think your homeowner's policy might cover you? In many cases your coverage could be 10 to 25 per cent of the regular policy amount when personal goods are stolen when you are abroad. Now, since you don't bring everything in your house when you travel, that's not really anything to worry about. What does cause concern is that you have to prove what was lost or stolen. You'll potentially need a receipt for that camera.

I haven't touched all the areas that could catch one out. So where do you go for more information? Call your agent and talk it over. Some people would rather have their teeth pulled than talk to an insurance agent, but you might thank them if you end up having to actually have your teeth pulled when you're out of the country.

Preet Banerjee, B.Sc, FMA, DMS, FCSI, is a W Network Money Expert, and blogs at wheredoesallmymoneygo.com. You can also follow him on twitter at @PreetBanerjee

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What else you need to know before you travel

Travel medical insurance

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1. Ask about any exclusions. What's not included that maybe should be covered?

2. Ask about pre-existing conditions coverage.

3. Is there a deductible? How much is it?

And check for the "stability clause" to make sure you are still covered in the event of a change to your prescriptions or a recent hospital stay as some insurance companies will deny your claim in the event of these circumstances prior to a trip.

Other points:

- Have someone check your place regularly, especially during the winter when pipes can freeze

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- If you have someone going to your house regularly to check that things are fine (i.e. the furnace is still running so your pipes won't burst), then in the event of damage you can comfortably say to your insurance company that you did everything you could to make sure that there was no damage to your home while you were away.

- In this situation, if your friend found a flood and did what he or she could (i.e. turned off the water) you would be covered for all the damage (even if there was incremental damage for leaving the water standing for some extra time)

Source: Tammy Ezer, InsuranceHotline.com

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